Bad forecasts

Here's Don Boudreaux quoting David Harsanyi:

(...) Congress estimated Medicare's cost at $12 billion for 1990 (adjusted for inflation) when the program kicked off in 1965. Medicare cost $107 billion in 1990 (...)

This seems like a catastrophic forecasting error. How come the U.S. government didn't go bankrupt by 1990? The reason is that while the increase in Medicare spending far exceeded anyone's expectations, so did GDP growth. For example, $5.1 billion that Medicare cost in 1968 amounted to 0.6% of GDP; those $107 billion it cost in 1990 were 1.9% of GDP--much higher, but not catastrophically so. (See Tables F-9 and F-10 here for data.) However, recently the rate of growth of Medicare spending relative to output has increased as well; in 2007 the program cost us 3.2% of GDP ($436.3 billion in absolute terms).